Ministry of Micro,Small & Medium Enterprises
Enhanced Import Duty on Bamboo Sticks to give a big boost to Agarbatti and Bamboo Industries in India: KVIC
The Central Government’s decision to increase import duty on bamboo sticks from 10% to 25% will open up new avenues of self-employment in the country. Welcoming the decision in a statement issued today, Khadi & Village Industries Commission has said that, in the next 8-10 months, at least one lakh new jobs will be created in the Agarbatti industry, a major activity under the village industry sector in India, according to industry players.
KVIC said that the decision was taken by the Finance Ministry on the initiative of Union Minister for MSME, Shri Nitin Gadkari who had requested the Prime Minister Shri Narendra Modi to increase the import duty on bamboo sticks to discourage heavy import and help local industry grow. The decision assumes great significance as heavy import of bamboo sticks from China and Vietnam caused huge employment loss in India. This decision will pave the way for setting up of new agarbatti stick manufacturing units to meet the ever-growing demand of Agarbatti in India.
At present, the KVIC said, consumption of incense sticks in India is pegged at a whopping 1490 tons per day but only 760 tons per day is locally produced. Hence, the huge gap between the demand and supply resulted in heavy import of raw agarbatti. Consequently, the import of raw agarbatti increased from just 2% in 2009 to 80% in 2019. In monetary terms, the import of raw agarbatti in India increased exponentially from Rs 31 crore in 2009 to Rs 546 crore in 2019 due to reduction of import duty in 2011 from 30 % to 10 %, it added. KVIC stated, "This hit the Indian agarbatti manufacturers hard and resulted in closure of nearly 25% of the total units".
However, on request of Khadi and Village industries Commission , the Ministry of Commerce on August 31, 2019, placed the import of raw agarbatti under “Restricted” category. But while the restriction on import revived hundreds of agarbatti units in states like Maharashtra, Madhya Pradesh, Uttar Pradesh, Gujarat and several North Eastern states, it also prompted the local traders to import round bamboo sticks for manufacturing of raw Agarbatti. This resulted in increase in import of Bamboo sticks from Rs 210 crore in 2018-19 to Rs 370 crore in the year 2019-20.
KVIC Chairman, Shri Vinai Kumar Saxena said this single decision will strengthen the agarbatti as well as the bamboo industry in India. “India is the 2nd largest producer of bamboo in the world but ironically, it is also the 2nd largest importer of bamboo and its products. The hike in import duty on bamboo sticks from 10% to 25% will curb heavy import from China and encourage local manufacture in Agarbatti and bamboo industries. We are expecting now India will become "atamnirbhar"in Agarbatti production soon which will create thousands of new jobs,” Saxena said.
“Agarbatti making industry is a part of the Village Industry, which requires a very small capital and less technical skill. This industry employs mostly women workers. In the post Covid scenario, this industry will prove to be a boon for the migrant workers. The Agarbatti industry can realize the Prime Minister’s dream of ‘Atmanirbhar Bharat’”, Saxena added.
Notably, India produces 14.6 million tons of bamboo every year with nearly 70,000 farmers engaged in bamboo plantation. While 136 varieties of bamboo are found in India; the Bambusa Tulda variety, which is used for making agarbatti sticks, is found in abundance in the North eastern region. The KVIC has also launched a bamboo plantation drive to make India self-sufficient to meet the growing demand of bamboo in the next 3-4 years.